The East African company will repay the $10 million by supplying graphite flake from its Mahenge project in Tanzania, the company said on Monday May 29.
Black Rock intends to invest the money in the development of the Mahenge project.
Black Rock, which is listed on the Australian Securities Exchange, is going through a process of debt financing. The Posco deal converts the term sheet announced on 23 December 2021 to full-form agreements and paves the way for Black Rock to move into commercial production.
The deal was confirmed between Black Rock’s Tanzanian subsidiary, Faru Graphite and Posco’s 60%-owned battery business, Posco Future M.
“The binding agreements with Posco provides critical customer validation that we have a commercial and high-value graphite product that will be sold as a qualified product into consumer markets under a long-term offtake contract. Mahenge is the only large-scale graphite project [outside China] to achieve this outcome,” Black Rock chief executive officer John de Vries said.
Posco acquired a 15% stake in Black Rock in 2021.
Under the offtake agreement, Posco has committed to take 100% of the graphite fines for the planned life of mine for module 1 production, Fastmarkets understands.
Graphite fines are the feedstock for the active anode material for lithium-ion batteries.
Fastmarkets’ weekly price assessment for graphite flake 94% C, -100 mesh, fob China, was $670-715 per tonne on May 25.
The price has fallen by $115-160 per tonne from $830 per tonne on November 24, 2022, due to weaker-than-expected demand from the anode sector.
Posco’s anode business is expected to require 30,000 tonnes per year from Black Rock, with a minimum supply of 20,000 tpy.
The anode market is expected to grow rapidly with the acceleration in the take up of electric vehicles.
Posco anticipates its need for graphite concentrate will rise from 114,000 tonnes in 2022, rising to 229,000 tonnes in 2025, before reaching 417,000 tonnes in 2030.
The South Korean company anticipates needing the increased volume of flake graphite to grow its anode business from 82,000 tpy in 2022 to 320,000 tpy by 2030.
The company produces anode and cathode, and was the largest anode producer outside of China in 2022.
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